This report, the third in a series on Chinese economic activities in the Western Balkans, provides recommendations for U.S. and partner responses to China’s growing economic and political influence in the region and a “red flags” checklist to help identify activities that warrant further scrutiny.
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As China’s funding for infrastructure and other investments expands along its Belt and Road Initiative, its economic and political influence is growing in the Western Balkans, a strategically contested area on the EU’s periphery. This report, part of a two-year effort to track Chinese economic influence in the region, draws from a new CSIS dataset to identify key trends, including China’s geographic and sectoral priorities, low project completion rates, and an emerging second wave of digital investments.
The European Commission has become increasingly critical of various Chinese investments within the EU, fueling an ongoing debate within Europe about investment screening. While the EU released a framework for foreign investment screening implicitly aimed at China in November 2018, the debate has exposed cross-cutting divisions within Europe. Looking ahead to 2019, we should not expect a clear resolution anytime soon.
“China has lavished investment pledges on Balkan states as it prepares for a summit with 16 EU countries and aspiring members, stoking fears in Brussels and influential national capitals of an effort to divide the bloc” reports the Financial Times, citing data collected in collaboration with the CSIS Reconnecting Asia Project.
Nowhere else in Europe has China’s Belt and Road Initiative (BRI) been met with quite such a warm embrace as in Central and Eastern Europe (CEE). China’s large-scale financing of highways, railways, ports, and other infrastructure to better connect China to Southeast Asia, Africa, the Middle East, and Europe has clearly struck a chord with CEE leaders.